Chartered Accountants dislike current domestic tax transparency legislation

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  • The domestic tax transparency measures impact all large companies: they make no distinction between those with domestic and international activities, public or private. Reports that private companies may be excluded are therefore welcome. The publication of private company tax data raises legitimate concerns about shareholder rights to privacy and the differential treatment of private companies vis-a-vis other business structures, such as partnership and trusts.
  • The disclosure does not convey the various tax adjustments – legally available under the law to all companies large and small – relevant in arriving at taxable income. There is therefore great potential for misunderstanding and damage to a company’s brand and reputation.  For reporting entities, the tax note in the published accounts already provides more detailed information.
  • Companies are developing differing responses to the measure: at one extreme, some are developing a detailed communication strategy to convey information about their total tax contribution to Australian society, whilst others are doing nothing, relying instead on the right that every taxpayer has to keep their tax affairs confidential. These diverse outcomes reflect a policy whose objectives were never carefully thought through.
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